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ACRE Program Payments and Risk Reduction: An Analysis Based on Simulations of Crop Revenue Variability

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  • Dismukes, Robert
  • Arriola, Christine
  • Coble, Keith H.

Abstract

Crop revenue variability, which differs across crops and their growing regions and the geographic levels at which revenue is measured, is the focus of the Average Crop Revenue Election, an agricultural commodity program that was first available to producers in 2009. Using an empirically-based simulation model of an extensive set of representative farm acres of corn, soybeans, wheat and cotton, we analyze how ACRE payments would vary under different guarantee price and expected market price scenarios and how ACRE payments and risk reduction would be distributed across crops and regions.

Suggested Citation

  • Dismukes, Robert & Arriola, Christine & Coble, Keith H., 2010. "ACRE Program Payments and Risk Reduction: An Analysis Based on Simulations of Crop Revenue Variability," Economic Research Report 262248, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersrr:262248
    DOI: 10.22004/ag.econ.262248
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    References listed on IDEAS

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    1. Vincent H. Smith & Barry K. Goodwin, 1995. "The Economics of Crop Insurance and Disaster Aid," Books, American Enterprise Institute, number 53374, September.
    2. Woolverton, Andrea E. & Edwin, Young, 2009. "Factors Influencing ACRE Program Enrollment," Economic Research Report 55954, United States Department of Agriculture, Economic Research Service.
    3. Zulauf, Carl R. & Dicks, Michael R. & Vitale, Jeffrey D., 2008. "ACRE (Average Crop Revenue Election) Farm Program: Provisions, Policy Background, and Farm Decision Analysis," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 23(3), pages 1-7.
    4. Cooper, Joseph C., 2009. "Economic Aspects of Revenue-Based Commodity Support," Economic Research Report 55838, United States Department of Agriculture, Economic Research Service.
    5. Mario J. Miranda & Joseph W. Glauber, 1991. "Providing Crop Disaster Assistance through a Modified Deficiency Payment Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(4), pages 1233-1243.
    6. Mario J. Miranda, 1991. "Area-Yield Crop Insurance Reconsidered," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(2), pages 233-242.
    7. Chad E. Hart & Bruce A. Babcock, 2000. "Counter-Cyclical Agricultural Program Payments: Is It Time to Look at Revenue?," Center for Agricultural and Rural Development (CARD) Publications 99-bp28, Center for Agricultural and Rural Development (CARD) at Iowa State University.
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    Cited by:

    1. Jansen, Jim A. & Stockton, Matthew C. & Lubben, Bradley D., 2012. "Modeling Correlated and Disaggregated Crop Revenue Distributions: Implications under Mixed Policy and Program Initiatives," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124688, Agricultural and Applied Economics Association.
    2. Cooper, Joseph C. & O'Donoghue, Erik J., 2011. "Identifying and Reducing Overlap in Farm Program Support," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103261, Agricultural and Applied Economics Association.
    3. Dismukes, Robert & Coble, Keith H. & Miller, Corey & O'Donoghue, Erik J., 2013. "The Effects of Area-based Revenue Protection on Producers’ Choices of Farm-level Revenue Insurance," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149545, Agricultural and Applied Economics Association.
    4. Arriola, Christine & Dismukes, Robert & Coble, Keith H. & Ubilava, David & Cooper, Joseph C., 2011. "Alternatives to a State-Based ACRE Program: Expected Payments Under a National, Crop District, or County Base," Economic Research Report 262235, United States Department of Agriculture, Economic Research Service.
    5. Hungerford, Ashley & O'Donoghue, Erik, 2016. "Federal Crop Insurance Options for Upland Cotton Farmers and Their Revenue Effects," Economic Research Report 249774, United States Department of Agriculture, Economic Research Service.
    6. Jesse Tack & Keith Coble & Barry Barnett, 2018. "Warming temperatures will likely induce higher premium rates and government outlays for the U.S. crop insurance program," Agricultural Economics, International Association of Agricultural Economists, vol. 49(5), pages 635-647, September.
    7. Jansen, Jim A. & Lubben, Bradley D. & Stockton, Matthew C., 2012. "Analyzing Crop Revenue Safety Net Program Alternatives and Impacts on Producers and Program Costs," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119784, Southern Agricultural Economics Association.

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